India ETF Space Has a New Player
November 24th, 2009 at 2:00pm by Tom Lydon
India’s economic and exchange traded fund (ETF) growth is one of the year’s most compelling stories. Investors who find themselves intrigued by the country will be pleased to hear that there’s a new fund to access the rapidly growing emerging market.
iShares has finally launched the iShares S&P India Nifty 50 (Nasdaq: INDY), which has been in registration for years. The fund will have some ground to make up, says Cinthia Murphy for IndexUniverse. It launched with $20 million in assets, while the other two India ETFs hold several hundred million apiece. INDY will invest in securities and depositary receipts of India’s 50 largest companies by market cap.
Top sectors in the fund include banks, 17.1%; refineries, 13.5%; computer/software, 12%; and engineering, 6.7%. The expense ratio is 0.89%.
The two other major ETFs that are pure plays on India are:
- PowerShares India (NYSEArca: PIN): up 75.3% year-to-date
- WisdomTree India Earnings (NYSEArca: EPI) up 92.5% year-to-date
Together, they have about $900 million between them as of Oct. 31, spurring other BRIC or emerging market funds to increase their exposure to India, reports The Economic Times. (Read about the investor influx in India’s ETFs).
The Indian economy, projected to grow by 6.1% in 2009-10 and 7.1% next year, has weathered the global downturn relatively well.
Even though stimulus may eventually be withdrawn in India, governments won’t do it until their economies are on solid footing. As long as emerging markets continue to make changes that lead to greater growth, India’s uptrend could have legs. Emerging markets are becoming major players on the global economic scene, and it’s unwise to ignore them. (What next for India and related ETFs?)
The major players in the economic recovery include China, India and the United States. Hindustan Times reports that the Organization of Economic Cooperation and Development’s (OECD) claims that calls for a total turnaround is premature and a recovery is timid, at best, thanks to continuing rampant unemployment.
For more stories about India, visit our India category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.